Repost – Exchange Traded Derivatives in an Automated World

A repost from the Blog The Bull Run. Worth the read, especially this paragraph:

The potential benefits of outsourcing middle and back-office functions to assist in the ETD trading process have been well documented over the years. However, the financial crisis and changing regulations that are still being discussed have forced financial services firms to reassess their operations and outsourcing plans. It is no longer just about cost savings and flexibility, but also about complying with regulations and improving competitive positions in difficult business conditions. Those that adopt new, more sophisticated and automated solutions can differentiate their offering from their competitors.”

Exchange Traded Derivatives in an Automated World.

via Exchange Traded Derivatives in an Automated World.

A post on Bitcoin.

This is a Blog that tries to boldly navigate and understand the world of Investment, Economics and, by being bold to honour the subtitle of entrepreneurship.

Today I would like to post about the most recent innovation that is buzzing around for the past couple of years or so: Bitcoin. This is what is called the leading cryptocurrency. Yes there are plenty of them. Even Amazon announced recently that it is planning to enter this field by selling its own cryptocurrency. But Bitcoin stills remains as a recognized leader.

I must confess that I’ve done my research on the topic, thought about it and drawn the conclusions that could possibly be drawn by someone in  a relatively limited position of knowing just the very basics about the technical details. There are however always the possibility of improving the required knowledge of the subject, a blessing of the age of open-source software. And combine this with the fundamentals of Money and monetary systems and try to pin down the real possibilities of Bitcoin ever reach a level of accepted means of exchange, store of value and unit of account and be truly considered proper Money. For now that seems only a very distant reality.

Notwithstanding all of this it is worth, I suppose, to take a look at a long series of entries in the Financial Times’s Alpahville about this new phenomenon by Izabella Kaminska and others. It makes for quite interesting read, and it is instructive and well researched, as always is the case in publications of indisputable merit and reference.

Much was written here and there about cryptocurrencies. For example the argument that they emerge as a byproduct of the recent Financial Crisis, that thorn the confidence in a centralised Monetary Systems; there is some truth in that maybe…. Then there are those that point to the obscure nature of its original founder: a japanese named Satoshi Nakamoto, that nobody knows who really is, to a sign that something of a conspiratorial nature may driving the motivation for the cryptomania. I wouldn’t buy in all those arguments. But looking at the undoubted skill of the proponents of Bitcoin in matters of Computer Science and of payments systems, maybe something more fundamental is going on and this something is at core of our Banking systems, the technology surrounding it and paths of innovation that inevitably will succeed in the field. Of that I’ve got no much doubts, given the pace of an intensive innovation sector. In the Banking sector just reminding ourselves of the current trend in Innovations like Big Data, the efforts to integrate the systems of Settlement and Clearing of securities or, in the more mundane Retail Banking with the strong trend of integration of  Telecommunications applications with the services of Banking, should make us humbly believe that the possibility of disruptive technological shocks is very high.

We all can see then that this ground is a fertile one for Innovation, Entrepreneurship and opportunities. But it is also one of its own perils, which will need understanding and good management. The recent bankruptcy scandal of a Bitcoin Broker cast a spell of doubt on the phenomenon though. There were losses to the tune of $400 million or more.

As always will be in the World of serious Business, carefull consideration, due diligence and high ethical standards must be the norm. Even if the innovations are sound and potential positively disruptive.

 

Future reform for the FX markets…?

The huge 4 trillion dollar forex markets may well be in the spotlight on matters concerning proper regulation and transparency. As FT’s Patrick Jenkings tells the chief editor of Financial Times, this market might be overhauled following the most recent scandals of manipulation like the Libor scandal, and a proper scrutiny of moral hazard issues arising from the big bonus payed to top traders in this Market. For me this development might be good for the Markets specially fro retail traders which normally find themselves in a vulnerable and disadvantaged position.

The OTC Space weekly round-up

This week round up from The OTC Space. As always it is a great source of good posts on matters related to cutting edge Financial Markets, platforms derivatives and all the Risk Management, technological, regulatory and scientific issues related with Finance. Worthy….!!

Single-Dealer Platforms evolve and remain relevant

Excellent blog on trading platforms, dealing in the markets and the modern era of Digital Investment Management!

SingleDealerPlatforms.Org

The evolving global regulatory landscape is fundamentally changing how banks operate, the returns available, the business lines and markets in which they can effectively compete, and the way in which they interact with and service their clients via their Single-Dealer Platforms.

For example, under Dodd Frank, standardised swaps trading with clients will migrate from OTC bilateral trading, over to regulated venues such as SEFs. This will see the value proposition and revenue generated for banks likewise shift from a

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Weekly Roundup | Post-Trade Processing | 4 November 2013

This post from The OTC space with some of most important links for this week on the Swaps markets landscape for this week.

Noteworthy the growing importance and critical role of technological developments in Swaps Execution Facilities, as well as the overhaul on the regulation front.

A worthy contribution, as usual from The OTC Space.

 

Weekly Roundup | Post-Trade Processing | 4 November 2013.

via Weekly Roundup | Post-Trade Processing | 4 November 2013.